Investment incentives after 1 May 2015

11. 6. 2015

On 1 May 2015 an amendment to the Investment Incentives Act came into effect, which mainly recognises the changes in European legislation on state aid, which themselves came into effect on 1 July 2014. The amendment brings with it a number of positive changes for investors, as well as making investment incentives more attractive, even though there has been a reduction in the basic rate of actual aid which for large corporations is now set at 25 % of eligible expenditure.Probably the most significant change is the abolition of co-financing of part of investment projects through equity capital, which for many companies was a major obstacle in actually applying for investment incentives. In the case of investment projects in manufacturing this condition has been replaced with the obligation to create and for a certain time maintain at least 20 new jobs.

Going hand in hand with the actual amendment to the Investment Incentives Act is the change to certain provisions of the Income Tax Act regulating the conditions and procedures relating to the utilisation of investment incentives. Of these amendments we would especially highlight the relaxing of sanctions in the event of incorrect transfer pricing in transactions with related entities, which will no longer pose a threat to the loss of an investment incentive in the form of income tax relief, but penalties will be applied in the same way as for a breach of the condition to minimise the base.

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